Comments on The Myth that Growing Consumption Inequality is a MythTypePad2012-10-25T01:46:48ZMark Thomahttp://economistsview.typepad.com/economistsview/tag:typepad.com,2003:http://economistsview.typepad.com/economistsview/2012/10/the-myth-that-growing-consumption-inequality-is-a-myth/comments/atom.xml/SEO Expert India commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c34616988970b2012-12-07T16:29:09Z2012-12-07T16:29:09ZSEO Expert Indiahttp://www.riddsnetwork.in/I wish to express thanks to you for bailing me out of such a challenge. After surfing through the the...<p>I wish to express thanks to you for bailing me out of such a challenge. After surfing through the the web and obtaining suggestions that were not pleasant, I figured my entire life was well over. Being alive without the strategies to the issues you have fixed as a result of your report is a critical case, and those that might have in a negative way affected my entire career if I had not discovered your blog post.</p>tour commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee6025a54970d2012-12-07T09:58:28Z2012-12-07T09:58:28Ztourhttp://epackages.in/This is an excellent and informative work, this will really helpful for me in future. I like the way you...<p>This is an excellent and informative work, this will really helpful for me in future. I like the way you start and then conclude your thoughts. Thanks for this information .I really appreciate your work.</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d1e9cd2970c2012-10-30T17:11:37Z2012-10-30T17:11:37ZEMichaelgeez Demonize? "Actually, neo-liberal politicians/economists are loathe to tell us what is their optimal conception of a 'fair' marginal tax...<p>geez</p>
<p>Demonize?</p>
<p>&quot;Actually, neo-liberal politicians/economists are loathe to tell us what is their optimal conception of a &#39;fair&#39; marginal tax rate.&quot;</p>
<p>Strange, I have seen many such conceptions. Some even linked in here.</p>
<p>&quot;The first is the decrease in the bargaining power of labor, due to changing labor market policies and a decline of the more unionized sectors.&quot;</p>
<p>Seems I said this a long time ago in here.</p>
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<p>Who owns capital?</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d1924ca970c2012-10-29T21:49:12Z2012-10-29T21:49:12ZKyleDrDick, nowhere have I used any ad hominems (i.e. personal attacks) on anyone. As for data, I have given detailed...<p>DrDick, nowhere have I used any ad hominems (i.e. personal attacks) on anyone. As for data, I have given detailed arguments for why claims about inequality are incorrect. The major problem with such claims is that they confuse statistical categories with being flesh-and-blood human beings.</p>Noni Mausa commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32ea1201970b2012-10-29T20:15:32Z2012-10-29T20:15:32ZNoni MausaPlus, I actually heard one such argument made regarding the number of citizens with indoor toilets. (This, within the past...<p>Plus, I actually heard one such argument made regarding the number of citizens with indoor toilets. (This, within the past 15 years.)</p>
<p>Really. He proudly proclaimed that 98% of Canadians had &#39;em, therefore they weren&#39;t poor. No mention of the fact that it&#39;s not legal, most places, to sell or rent a place that doesn&#39;t have them. Sigh...</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48dda9d970d2012-10-29T19:52:43Z2012-10-29T19:52:43ZKyleThe link shows Saez doesn't like "income inequality." So if he doesn't like that, what is the alternative? He wants...<p>The link shows Saez doesn&#39;t like &quot;income inequality.&quot; So if he doesn&#39;t like that, what is the alternative? He wants the statistical income distribution to be made more equal. Maybe it&#39;s wrong to say he wants it ocmpletely equal, but he wants it where there isn&#39;t any large degree of &quot;inequality&quot; as he sees it. </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d187e62970c2012-10-29T19:50:04Z2012-10-29T19:50:04ZKyleThe standard argument given when it is pointed out that Californa has financial problems is Proposition 13. But there's a...<p>The standard argument given when it is pointed out that Californa has financial problems is Proposition 13. But there&#39;s a lot more to it then that. You have a state that is heavily-controlled by the public employee labor unions (who have refined bullying to an art form) and the environmental lobby. The state is very profligate in its spending (about 1/3 of the nations&#39; welfare recipients live in California) and also has an extreme number of regulations which have created a very anti business environment. </p>
<p>Now don&#39;t get me wrong, I&#39;m fine with safety nets and appropriate levels of regulation, but California has way over-done it, and it is wrecking their economy. It&#39;s a shame, because it was through good Democratic party policies that they helped make California into the Golden State:</p>
<p>Great infrastructure<br />
Great public schools<br />
Great university system<br />
Business-friendly economy</p>
<p>Since Governor Jerry Brown in the late 1970s signed the Dill Act which allowed the state&#39;s public sector workers to unionize and since the far-left has taken over the state&#39;s government (partially as a result of the unionization as well), the state has ended up over-taxing, over-regulating, and over-spending itself. It essentially operates as a one-party state. </p>
<p>It could be an economic monster (it still is, but could be even moreso) if they&#39;d just lighten up some on the regulations and spending. </p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e8af93970b2012-10-29T16:19:49Z2012-10-29T16:19:57ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749My problem with neo-liberals saying "pay a little more" is that "a little more" has no scientific basis, and is...<p>My problem with neo-liberals saying &quot;pay a little more&quot; is that &quot;a little more&quot; has no scientific basis, and is generally never, ever enough. Actually, neo-liberal politicians/economists are loathe to tell us what is their optimal conception of a &#39;fair&#39; marginal tax rate. From decade to decade we just know their tax response is: &quot;a little higher&quot;. It&#39;s the absence of foundation or precision that is troublesome to me. Otherwise, I have no beef with progressive taxation, per se.</p>
<p>Also, that technology in the form of capital displaces lower skilled workers and augments the productivity (and pay) of higher skilled workers is SCIENCE.</p>
<p>In the chart I shared, from a LIBERAL think tank BTW, (here it is again):</p>
<p><a href="http://www.flickr.com/photos/anthonyjuanbautista/8132343027/in/photostream/" rel="nofollow">http://www.flickr.com/photos/anthonyjuanbautista/8132343027/in/photostream/</a></p>
<p>it is shown that from 2000-2011, CAPITAL is the number one determinant leading to a gap in productivity vs. wages for median income earners; NOT the trappings of the highest earners (which is second). Meaning, the 1% aren&#39;t even the biggest culprits! Technology is the number one culprit.</p>
<p>I believe (and the literature supports) that in the US, the trend is for technology, in the form of capital, to displace lower-skilled workers, thus increasing inequality. Capital likewise makes the higher skilled more productive. Technology is marginally more productive than labor for the last 30 years or so! This stylized fact is not debatable, really. It just &#39;is&#39;.</p>
<p>Low-skilled labor is losing-out to capital, and THEN losing-out to the overpaid rich. I&#39;m sorry. I don&#39;t make the rules:</p>
<p><a href="http://www.flickr.com/photos/anthonyjuanbautista/8135340460/in/photostream/" rel="nofollow">http://www.flickr.com/photos/anthonyjuanbautista/8135340460/in/photostream/</a></p>
<p>Read what professional economists have to say about this trend:</p>
<p>&quot;Economists have identified three long-term factors that can explain why the wage-productivity gap has widened and the share of income accruing to labor [verses capital] has declined. The first is the decrease in the bargaining power of labor, due to changing labor market policies and a decline of the more unionized sectors. Another factor is increased globalization and trade openness, with the resulting migration of relatively more labor-intensive sectors from advanced economies to emerging economies. As a consequence, the sectors remaining in the advanced economies are relatively less labor-intensive, and the average share of labor income is lower. The third factor is technological change connected with improvements in information and communication technologies, which has raised the marginal productivity and returns to capital relative to labor.&quot;</p>
<p></p>
<p></p>
<p><br />
</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48c63b0970d2012-10-29T15:36:16Z2012-10-29T15:36:16ZEMichaelThat you should peddle your wares somewhere else. Just take the word demonize you used. "paying a little more" somehow...<p>That you should peddle your wares somewhere else.</p>
<p>Just take the word demonize you used. &quot;paying a little more&quot; somehow means demonizing?</p>
<p>And your capital income thought is insane. Who do you think owns it?</p>
<p>The lowest skilled worker in America 40 years ago made 1/3 more than the lowest skilled worker today.</p>
<p>&quot;The problem with that argument is that while some studies have indeed left out such factors, others have not. A 2011 Congressional Budget Office study that included all those factors found that, whaddya know, between 1979 and 2007 the top 1 percent saw its income grow by 275 percent, which was about seven times more than income growth for the middle 60 percent and about 15 times more than income growth for the bottom 20 percent. Anyway you slice it, income inequality has been growing rapidly. (Overall, the federal government effects about one-quarter less redistribution today through taxes and benefits than it did in 1979.&quot;</p>
<p><a href="http://www.tnr.com/blog/plank/109157/conservative-inequality-denialism" rel="nofollow">http://www.tnr.com/blog/plank/109157/conservative-inequality-denialism</a></p>
<p>That&#39;s what I think. Not that the rich make too much, but that our policies are creating a serf class. One that works more hours for the same, or less pay, than their parents did for the exact same job.</p>
<p>It is a continuing problem which has no good end for any part of the income spectrum.<br />
</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e85383970b2012-10-29T15:10:54Z2012-10-29T15:11:02ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Telling an asshole like yourself to "fuck off" ('Dr.') Dick is NOT bad manners--it's a public service. You're welcome.<p>Telling an asshole like yourself to &quot;fuck off&quot; (&#39;Dr.&#39;) Dick is NOT bad manners--it&#39;s a public service.</p>
<p>You&#39;re welcome.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e82854970b2012-10-29T14:38:47Z2012-10-29T14:38:47ZDrDickLOL. You must have been looking in the mirror and confused your reflection with me. Your only critiques of Saez...<p>LOL. You must have been looking in the mirror and confused your reflection with me. Your only critiques of Saez and Krugman have also been ad hominems and have presented no data to support any of your critiques or fact free assertions. When you learn how to do research and present a logical, empirically supported argument, I will strat treating you like an adult rather than a loud-mouthed, arrogant adolescent. And the man who told me to &quot;fuck off&quot; because I said something he disagreed with wants to accuse me of bad manners? Get a life, loser.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48c13f7970d2012-10-29T14:34:17Z2012-10-29T14:34:17ZDrDickI rest my case regarding ad hominems (also the total lack of reading and cognitive skiils).<p>I rest my case regarding ad hominems (also the total lack of reading and cognitive skiils).</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d16926d970c2012-10-29T14:02:03Z2012-10-29T14:02:10ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749No more meaningful minority power left. All Dem now. The progs have won in CA. Consequently, we'll see if the...<p>No more meaningful minority power left. All Dem now. The progs have won in CA.</p>
<p>Consequently, we&#39;ll see if the citizens vote themselves higher taxes. I&#39;m on pins and needles. Brown frames it as a &#39;tax the rich&#39; and &#39;soak the other guy&#39; measure, but methinks the citizenry are getting wise.</p>
<p>The TX legislature only meets every other year, BTW. Man, if only we could pull that off in Cali.</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e7f5b8970b2012-10-29T13:57:50Z2012-10-29T13:57:50ZEMichaelWhy don't you tell Kyle what has happened to Cal yourself? Y'know, where a minority can wag the dog and...<p>Why don&#39;t you tell Kyle what has happened to Cal yourself?</p>
<p>Y&#39;know, where a minority can wag the dog and then complain about the dog not being able to wag its tail?</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48bc12b970d2012-10-29T13:29:18Z2012-10-29T13:29:27ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Mike I'm from CA! I still own some property there. Please, tell me something good about my former home! Tell...<p>Mike I&#39;m from CA! I still own some property there. Please, tell me something good about my former home!</p>
<p>Tell me it&#39;s not a profligate Banana Republic. Tell me that the good neighborhoods I grew up in (SoCAL) aren&#39;t now an extension of Northern Mexico.</p>
<p>Tell me that a monolithic, single party progressive govt will return CA to its former glory!</p>
<p>Please, give me some good news!</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d165d06970c2012-10-29T13:19:36Z2012-10-29T13:19:36ZEMichaelNot one single word that says income should be equally divided appear in your link. What is your point in...<p>Not one single word that says income should be equally divided appear in your link.</p>
<p>What is your point in continuing to claim things which are not true.</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48bb198970d2012-10-29T13:17:27Z2012-10-29T13:17:27ZEMichaelYou obviously have absolutely no knowledge whatsoever about California, do you?<p>You obviously have absolutely no knowledge whatsoever about California, do you?</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48b7cd9970d2012-10-29T12:33:36Z2012-10-29T12:33:40ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Kyle: I warned you about the Troll-asshole-Marxist Dr. Dick. He's compelled to put 'Dr' in his screen name (as if...<p>Kyle: I warned you about the Troll-asshole-Marxist Dr. Dick. He&#39;s compelled to put &#39;Dr&#39; in his screen name (as if he&#39;s respectable), yet he lacks the cognitive apparatus and good manners required for constructive engagement. Ignore him.</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d14952a970c2012-10-29T06:56:26Z2012-10-29T06:56:26ZKyleWhile you may disagree with my arguments, I do not engage in ad hominems. Nowhere have I personally attacked anyone....<p>While you may disagree with my arguments, I do not engage in ad hominems. Nowhere have I personally attacked anyone. I have attacked the WORK of someone like Saez. I haven&#39;t said anything about Krugman, although he is another who over-simplifies on these issues. </p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e4f061970b2012-10-29T03:35:20Z2012-10-29T03:37:30ZDrDickIf you had any I would, but your speciality is ad hominems against anyone, like Saez and Kruman, who prove...<p>If you had any I would, but your speciality is ad hominems against anyone, like Saez and Kruman, who prove you are an idiot.</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e4b91f970b2012-10-29T02:57:48Z2012-10-29T02:58:49ZKyleRather than producing ad hominem attacks, you might want to try refuting my actual arguments.<p>Rather than producing ad hominem attacks, you might want to try refuting my actual arguments.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d12bf81970c2012-10-29T01:18:03Z2012-10-29T02:29:13ZDrDickAd hominen arguments in the absence of data and clear evidence that you do not understand statistics or economics at...<p>Ad hominen arguments in the absence of data and clear evidence that you do not understand statistics or economics at all. Keep digging that hole boyo, the estimate of your IQ drops with every post . A couple more and we will be in negative numbers.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d12bcde970c2012-10-29T01:16:16Z2012-10-29T01:16:16ZDrDickHere is the reality condensed into graphs that you can maybe read: http://www.businessinsider.com/dear-america-you-should-be-mad-as-hell-about-this-charts-2012-6?op=1 Do try to visit reality someday, you...<p>Here is the reality condensed into graphs that you can maybe read: <a href="http://www.businessinsider.com/dear-america-you-should-be-mad-as-hell-about-this-charts-2012-6?op=1" rel="nofollow">http://www.businessinsider.com/dear-america-you-should-be-mad-as-hell-about-this-charts-2012-6?op=1</a></p>
<p>Do try to visit reality someday, you will find it a strange and exotic place for you.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d124296970c2012-10-28T23:44:48Z2012-10-28T23:44:53ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Kyle: Don't you understand you're ripping at these guy's souls when you make arguments such that inequality doesn't harm growth...<p>Kyle: Don&#39;t you understand you&#39;re ripping at these guy&#39;s souls when you make arguments such that inequality doesn&#39;t harm growth (which it doesn&#39;t); or that the rich don&#39;t cause the poor to be poorer (which they don&#39;t); or that technology capital is the poor&#39;s worst enemy (which it is).</p>
<p>The ascent of technology manifested as capital is screwing/substituting the least-skilled among us. This same technology/capital is making the more-skilled among us more productive, with resulting greater wages.</p>
<p>Given the above, where do these people think inequality will trend? And their solution is to use a leaky bucket, to recoup from the rich/capital owners, to give back to the low-skilled, who got screwed by technology. Well ok, but why don&#39;t we just work on making the low-skilled more productive? But this would BLAME the low-skilled, which is blaming the victim (in the neo-liberal mind).</p>
<p>Here&#39;s a nice graph that shows the Left isn&#39;t even hating-on the number one culprit of the wage-productivity gap over the past 11 years, which is shifts in national income toward capital. Inequality in labor compensation is second!</p>
<p><a href="http://www.flickr.com/photos/anthonyjuanbautista/8132343027/" rel="nofollow">http://www.flickr.com/photos/anthonyjuanbautista/8132343027/</a></p>
<p>But, it&#39;s easier to demonize the millionaires and billionaires (think Obama in any stump speech). It&#39;s hard to demonize technology; not an easy message--as everyone uses it.</p>
<p>See the scam? Don&#39;t mind the technology behind the curtain--just focus on the billionaires stealing your wages!</p>
<p>What say you, Mike?</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d11d178970c2012-10-28T22:16:19Z2012-10-28T22:16:19ZKyle"psuedodmalarkey, to be kind." That's a good description of this Saez guy's work. "Find a single thought from Saez that...<p>&quot;psuedodmalarkey, to be kind.&quot;</p>
<p>That&#39;s a good description of this Saez guy&#39;s work. </p>
<p>&quot;Find a single thought from Saez that says, or even infers, that income &quot;apparently is supposed to be equally divided&quot;.&quot;</p>
<p>Here is an NYT article where he says that the U.S. &quot;is getting accustomed to a completely crazy level of inequality:&quot;</p>
<p><a href="http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-the-buffett-rule-is-just-a-start.html?pagewanted=all&_r=0" rel="nofollow">http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-the-buffett-rule-is-just-a-start.html?pagewanted=all&amp;_r=0</a></p>
<p>The guy is complaining about some perceived inequality because he doesn&#39;t like the statistical distribution of income and wealth. He thinks wealth and income need to be a lot more equally divided across the various income and wealth brackets.</p>
<p>It&#39;s a quack argument, for all the reasons I have given. </p>
<p>&quot;And that kind of thing can be done to just about every single one of your long, drawn out rants. </p>
<p>I award you no points.&quot;</p>
<p>What&#39;s funny is if I was to just come on to this site saying, &quot;You&#39;re all wrong&quot; and give simple right-wing talking points, I&#39;d get called on it. But then because I try to explain my points in some detail, I get accused of &quot;ranting.&quot; </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d11c71a970c2012-10-28T22:07:44Z2012-10-28T22:07:44ZKyle"Economically, of course, they have no arguments." Take a look at Texas vs California, or Germany and Switzerland (two of...<p>&quot;Economically, of course, they have no arguments.&quot;</p>
<p>Take a look at Texas vs California, or Germany and Switzerland (two of the most right-wing nations in Europe) versus nations like Greece, Spain, Italy, France, Portugal, etc...that are much more left-wing. </p>
<p>&quot;So lets briefly dispatch the two salient points in your reply. One is the appeal to freedom, the other is the labeling of tax as &#39;stealing&#39;.</p>
<p>The latter first. The condition of private property is the state. As the briefest glance at history shows, those societies without states are also without private property. Those stateless scoieties have no sense of contract, to put it in Lockean and Hayekian terms. Without the state operating as the third, enforcing party, a contract is worthless and pointles. Thus, to deny the condition of private property - the state - by accusing it of maintaining itself by &quot;stealing&quot; - taxation - is to call for the abolition of contract, and thus of private property and of the logical meaning of stealing.&quot;</p>
<p>This is a strawman, because that&#39;s not what I&#39;m arguing about. When someone calls taxation stealing, they are not calling for no taxation or no government. Of course some minimum level of taxation is needed, as in order to have freedom, we must have government, and government needs taxes to function.</p>
<p>But there is a huge difference between taxing at the amount necessary in order to fund the basic necessary operations of government, versus taxing away people&#39;s income and wealth in the name of social justice, in some quest for &quot;equality.&quot;</p>
<p>People like this, you could have a country where there are all the basic functions of government, a powerful military, and a large welfare state, but if the so-called &quot;distribution of income&quot; is becoming concentrated at the &quot;top,&quot; then they&#39;d still say higher taxes are needed in order to &quot;fix&quot; the &quot;problem.&quot;<br />
<br />
&quot;The first argument is about freedom. Freedom is a political and moral term, in your argument, not an economic one. As an economic one, I&#39;d define freedom in terms of the capacity to act. And here we can use, as a rough measure, marginal utility. When the billionaire is diminished into a millionaire by the IRS, he suffers some microscopic diminishment of his marginal utility. On the other hand, the vast majority of non-billionaires could easily benefit from an expanded capacity to act - to, for instance, get affordable, state sponsored healthcare at reasonable prices. By this index, you expand freedom by denying perverse accumulations of fortune in a few hands.&quot;</p>
<p>Who defines what exactly a &quot;perverse&quot; accumulation of fortune is? Provided it&#39;s done legally, then all a large fortune means is that the person has to have created something for society that society values highly. Also, there&#39;s a difference between arguing the wealthy pay more to allow some larger public services to help everyone have more equal opportunity versus arguing the wealthy pay more simply because one doesn&#39;t like their having fortunes and others not having them (equality of outcome), and perceiving some kind of inequality because of the statistical &quot;distribution of income&quot; or &quot;distribution of wealth.&quot; </p>
<p>Regarding an expanded capacity to act, yes creating safety nets and certain public services of various forms can help with this greatly (equality of opportunity). The public library system for example is a great way to help people who otherwise can&#39;t afford books, and also libraries provide loads of other services today as well. But taxing the wealthy and affluent at high levels never works to pay for that kind of stuff. If you have to tax someone to the point of reducing them from being a billionaire to a millionaire, they will see it that you are stealing their wealth away. That is why such taxes never work. Far fewer people will continue to seek to become rich if one takes away that large a chunk of their wealth. And those who do will quickly find ways to hide their money, which is what already wealthy people do in the face of such taxes. They&#39;ll hide their money in tax havens of various types. This is what happened in both England and the United States under such taxes and is about to happen in France with their new wealth tax. </p>
<p>Universal healthcare systems have to be paid for usually by the middle-class itself. That is why President Obama&#39;s &quot;Affordable Care Act&quot; requires people to purchase health insurance or pay a tax. In Germany, all people are mandated to purchase health insurance (the idea is to make all the people who willingly choose not to purchase health insurance but who otherwise could afford it to purchase it so as to be able to subsidize the people who legitimately can&#39;t afford it).</p>
<p>Large welfare states overall usually must be paid for by the middle-class. That is why the European countries have the VAT (&quot;Value-Added Tax,&quot; a very misleading name). VAT&#39;s mainly hit the middle-class and poor. </p>
<p>&quot;Myself, ideally, I&#39;d like absolute equality and the abolition of the &#39;rich&#39;. Unfortunately, as the Soviet Union showed, this is not only impossible - wealth simply transforms into some rentseeking party position - but pernicious. So communism is, at least undeer our present circs, ruled out. On the other hand, one can very well limit the wealthy and make them work harder.&quot;</p>
<p>You have no business trying to limit people from becoming wealthy. We want people to seek to become wealthy, because it leads to more goods and services being created and more jobs and economic growth. Also, &quot;the wealthy&quot; already are among the hardest working people in society. The old notion of the idle rich and the toiling poor is a thing of the past. You don&#39;t become affluent in today&#39;s society without doing a lot of hard work. </p>
<p>&quot;We need investment, and we need administration -&quot;</p>
<p>You want investment but you also want very punitive taxation that seriously disincentivizes such investment? </p>
<p>&quot;and we can carry the load of a compensation system that tends to overreward large investors and the managers of large enterprises. At a certain point, however, the overreward becomes a systematic problem. So it is best to make the tax life of the overrewarded difficult, and claw back as much as possible while still retaining this class. There&#39;s no iron-clad rule here.&quot;</p>
<p>A few problems with this part:</p>
<p>1) Who defines what &quot;over-rewarding&quot; an investor is? The investor is one of the owners of the company. They can make as much as the market will allow. </p>
<p>2) What &quot;systemic problem&quot; are you referring to?</p>
<p>3) You say &quot;claw back as much as possible while still retaining this class.&quot; You seem to think that in order for one person to get rich, someone else has to become poorer. That&#39;s not how it works. There is no fixed pie of wealth or income. Wealth is created. Thus, there is no &quot;clawing back&quot; of anything. It is TAKING of said person&#39;s income and wealth, which was created by their efforts, by force of the state. </p>
<p>Also, such people are not a &quot;class.&quot;</p>
<p>&quot;You should be happy with these conclusions, as they provide content for the otherwise bogus contention that we are more equal now than ever. That means, more equal than the gilded age, more equal than the twenties. More equal and richer and more free because we struck against the inequalities of wealth.&quot;</p>
<p>Except that we are more equal now than ever. Again, never before has the difference between the standard of living of a rich person and the standard of living of a &quot;poor&quot; person been so equalized. Go back to the Gilded Age and there was a HUGE diffence in the standard of living between the two.</p>
<p>Today, a person living below the poverty line has all the basics: air conditioning, heating, Internet access, color television, computer, access to fresh fruit and vegetables and meat, drinks of all kinds, better-quality healthcare than even the rich did in the Guilded Age, car with heater, air conditioner, radio, etc...maybe more, clean running hot and cold water, access to sanitation system (toilet), and so forth.</p>
<p>The difference between they and the rich guy is the rich guy just can live in a nicer home, drive a nicer car, eat nicer food, and have better healthcare. But we are pretty much all rich now, minus the truly poverty-stricken, such as the homeless. We are just unequally rich. Think about what a &quot;poor&quot; person will have in another fifty or one-hundred years. </p>
<p>&quot;Unfortunately, we let those inequalities get out of hand over the last thirty years, with the bad results we all know -&quot;</p>
<p>Inequality isn&#39;t what caused the economic crisis, it was an unregulated aspect of the financial system that led to that, along with a national housing bubble that developed. </p>
<p>&quot;for instance, the plutocrats becoming the largest welfare class in history, using their leverage to get the state to loan them 10-16 trillion dollars on laughable terms in the 2008-2010 period, when the delusions of the We built it crowd turned into the realpolitik of the plutocrats stealing as much as they could with bogus investment schemes and the like.&quot;</p>
<p>I agree on this. I think the bailout of the financial system was necessary, but something in which actions are needed to make sure such a blowup never happens again. <br />
<br />
&quot;Let&#39;s keep on trucking by finding many ways to be more equal, using the state, and making the rich work for their money, using the tax system, so that we can all be freeer and more equal. Stop the nonsense, tax the rich - but only as a first step in reforming a speculative economy gone mad.&quot;</p>
<p>You need to be careful with seeking &quot;equality&quot; as equality is not necessarilly a good thing. Equality of opportunity, sure, but government seeking equality of outcome never works. Equality of outcome occurs naturally via the free-market creating more and more goods and services. </p>
<p>Also as said, most &quot;rich&quot; already work hard. And if you tax them at the levels you&#39;re demanding, you&#39;ll kill off job creation and economic growth, reducing the chances for people to advance economically, while at the same time, creating an underclass of welfare recipients dependent on the state for support. Such people are not &quot;free&quot; at all. You also secure the wealth of the existing wealthy and inadverdently turn them into a fixed class because there are very few challengers to their wealth that arise in such a system. <br />
</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d105d76970c2012-10-28T17:59:43Z2012-10-28T17:59:43ZDrDickStill no facts I see, just boilerplate rancid libertarian hogwash with no basis in reality. I linked to a study...<p>Still no facts I see, just boilerplate rancid libertarian hogwash with no basis in reality. I linked to a study upthread that demonstrates that management are overcompensated and labor undercompensated according to their actual contribution to productivity, but you continue to ignore it.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee48565eb970d2012-10-28T17:07:45Z2012-10-28T17:07:51ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749I find it hilarious whenever neo-Liberals--media/laypeople/pundits--fall in love with an en vogue economist, and seize upon the latest study(ies) that...<p>I find it hilarious whenever neo-Liberals--media/laypeople/pundits--fall in love with an en vogue economist, and seize upon the latest study(ies) that comport with pre-existing neo-liberal values. (Saez is a &#39;scientist&#39; who advocates for higher taxes. Doesn&#39;t the moniker &#39;scientist-advocate&#39; seem weird to you?)</p>
<p>Saez! Saez! Saez! May he live 1,000 years!</p>
<p>At least Saez tells you where he&#39;s coming from in his job title. I appreciate the honesty:</p>
<p>EMMANUEL SAEZ<br />
UC Berkeley<br />
Professor of Economics <br />
Director, Center for Equitable Growth</p>
<p>The man&#39;s business card is dog-whistle music to neo-liberal ears!</p>
<p>Here&#39;s some Saez (the &#39;scientist&#39; with an ax to grind):</p>
<p>&quot;In sum, our work has shown the top 1% income share has increased dramatically in recent<br />
decades and has reached levels which had not been seen since before World War II and even<br />
since before the Great Depression when including capital gains. The reduction in taxes at the<br />
top since 2001 has mechanically exacerbated the discrepancy in disposable income between<br />
the rich and the rest of us. Thus, it is obvious that the progressive income tax should be the<br />
central element of the debate when thinking about what to do about the increase in inequality.<br />
Even conservatives like Alan Reynolds would agree and that is why they prefer to dismiss the<br />
facts about growing income inequality rather than face the debate on income tax progressivity<br />
at a time of growing economic disparity.&quot;</p>
<p>The above summarizes the nonsense of it all.</p>
<p>According to Saez, et. al, because productivity gains have accrued to physical capital (a point they marginalize) and to top earners (a point of emphasis) over the past few decades, rather than making the low-skilled more productive, we should just correct the outcome, after the fact, via taxation. What a ridiculously blunt tool--pathetic.</p>
<p>The last I checked, workers are STILL likely to be paid based on their individual labor productivity, which is determined by experience, skills, and education. Compensation is diverging from aggregate productivity for ALL labor classes owing to the ascent of capital (which is technology driven).</p>
<p>Your beef is with the displacement of low-skilled workers by machines, and the augmented productivity of higher-skilled workers (with concomitant pay increases) by machines.</p>
<p>Yet, you demonize the 1% or 5% or whatever of labor. Actually, Obama demonized ATM machines for a few weeks, but he got more play demonizing PE firms.</p>
<p>Liberals--protectors of science. Defenders of science! Bleghhh.</p>
<p>You should hate-on capital more. Here&#39;s some fuel for your fire:</p>
<p><a href="http://conversableeconomist.blogspot.com/2012/09/margaret-jacobson-and-filippo-occhino.html" rel="nofollow">http://conversableeconomist.blogspot.com/2012/09/margaret-jacobson-and-filippo-occhino.html</a></p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e07ba5970b2012-10-28T13:53:52Z2012-10-28T13:53:52ZDrDickWherein you demonstrate beyond all reasonable doubt that you are a delusional idiot who has no idea what he is...<p>Wherein you demonstrate beyond all reasonable doubt that you are a delusional idiot who has no idea what he is talking about. The words in your post quite simply do not mean what you think they do. None of them.</p>EMIchael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32e05281970b2012-10-28T13:23:11Z2012-10-28T13:23:11ZEMIchaelpsuedodmalarkey, to be kind. Find a single thought from Saez that says, or even infers, that income "apparently is supposed...<p>psuedodmalarkey, to be kind.</p>
<p>Find a single thought from Saez that says, or even infers, that income &quot;apparently is supposed to be equally divided&quot;.</p>
<p>And that kind of thing can be done to just about every single one of your long, drawn out rants. </p>
<p>I award you no points.</p>
<p><a href="http://www.youtube.com/watch?v=BcjIestFVOc" rel="nofollow">http://www.youtube.com/watch?v=BcjIestFVOc</a><br />
</p>EMIchael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0ed9cd970c2012-10-28T13:17:54Z2012-10-28T13:17:54ZEMIchaelhehehehe<p>hehehehe</p>EMIchael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0ed751970c2012-10-28T13:15:57Z2012-10-28T13:15:57ZEMIchaelgeez You somehow expect to track the income of 150 million people? Yes, people do move from one income level...<p>geez</p>
<p>You somehow expect to track the income of 150 million people?</p>
<p>Yes, people do move from one income level to another. But that does not matter at all. It matters what the income levels are doing.</p>Roger Gathman commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0e63a9970c2012-10-28T11:45:29Z2012-10-28T11:45:29ZRoger Gathmanhttp://www.limitedinc.blogspot.comKyle, thanks for the reply. It sometimes pays to push at rightwingers, because eventually they will shift out of political...<p>Kyle, thanks for the reply. It sometimes pays to push at rightwingers, because eventually they will shift out of political economics altogether and offer moral claptrap and paralogisms. Economically, of course, they have no arguments.<br />
So lets briefly dispatch the two salient points in your reply. One is the appeal to freedom, the other is the labeling of tax as &#39;stealing&#39;.</p>
<p>The latter first. The condition of private property is the state. As the briefest glance at history shows, those societies without states are also without private property. Those stateless scoieties have no sense of contract, to put it in Lockean and Hayekian terms. Without the state operating as the third, enforcing party, a contract is worthless and pointles. Thus, to deny the condition of private property - the state - by accusing it of maintaining itself by &quot;stealing&quot; - taxation - is to call for the abolition of contract, and thus of private property and of the logical meaning of stealing. <br />
The first argument is about freedom. Freedom is a political and moral term, in your argument, not an economic one. As an economic one, I&#39;d define freedom in terms of the capacity to act. And here we can use, as a rough measure, marginal utility. When the billionaire is diminished into a millionaire by the IRS, he suffers some microscopic diminishment of his marginal utility. On the other hand, the vast majority of non-billionaires could easily benefit from an expanded capacity to act - to, for instance, get affordable, state sponsored healthcare at reasonable prices. By this index, you expand freedom by denying perverse accumulations of fortune in a few hands. <br />
Myself, ideally, I&#39;d like absolute equality and the abolition of the &#39;rich&#39;. Unfortunately, as the Soviet Union showed, this is not only impossible - wealth simply transforms into some rentseeking party position - but pernicious. So communism is, at least undeer our present circs, ruled out. On the other hand, one can very well limit the wealthy and make them work harder. We need investment, and we need administration - and we can carry the load of a compensation system that tends to overreward large investors and the managers of large enterprises. At a certain point, however, the overreward becomes a systematic problem. So it is best to make the tax life of the overrewarded difficult, and claw back as much as possible while still retaining this class. There&#39;s no iron-clad rule here. <br />
You should be happy with these conclusions, as they provide content for the otherwise bogus contention that we are more equal now than ever. That means, more equal than the gilded age, more equal than the twenties. More equal and richer and more free because we struck against the inequalities of wealth. Unfortunately, we let those inequalities get out of hand over the last thirty years, with the bad results we all know - for instance, the plutocrats becoming the largest welfare class in history, using their leverage to get the state to loan them 10-16 trillion dollars on laughable terms in the 2008-2010 period, when the delusions of the We built it crowd turned into the realpolitik of the plutocrats stealing as much as they could with bogus investment schemes and the like. <br />
Let&#39;s keep on trucking by finding many ways to be more equal, using the state, and making the rich work for their money, using the tax system, so that we can all be freeer and more equal. Stop the nonsense, tax the rich - but only as a first step in reforming a speculative economy gone mad.</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4823635970d2012-10-28T06:10:34Z2012-10-28T06:10:34ZKyleI've read your links. I was pointing out with regards to the ones arguing about wages and household incomes, and...<p>I&#39;ve read your links. I was pointing out with regards to the ones arguing about wages and household incomes, and claims about income inequality, how those are over-simplifications. Remember, data is utterly meaningless if it gives an incorrect worldview about something.</p>
<p>Regarding Saez, his work is utter pseudoscience. And I mean that seriously. He studies primarily income inequality, and makes claims about the United States having a very high level of inequality, making claims about an increasing &quot;share&quot; of income &quot;going to&quot; &quot;the rich.&quot; He makes the same pseudoscientific mistakes in that he doesn&#39;t at all address the actual wealth available to the poorest members of society, he mistakes statistical brackets for being fixed classes of people, and he makes the incredibly ridiculous mistake of acting as if income is something that exists in some pre-existing supply that then gets divided up amongst society (and apparently is supposed to be equally divided).</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32ddad6b970b2012-10-28T03:41:24Z2012-10-28T03:41:24ZDrDickOh, and I think we know who won the asshole contest: "Anthony Juan Bautista said in reply to DrDick... Dick,...<p>Oh, and I think we know who won the asshole contest:</p>
<p> &quot;Anthony Juan Bautista said in reply to DrDick...</p>
<p>Dick, fuck off. We&#39;re done, pal. Have a great life.&quot;</p>
<p>All because I pointed out (with data) that capital was in fact the problem and that I am a Marxist. Doesn&#39;t feel rather pathetic worshiping a failed theorist like Hayek who was in love with fascism?<br />
</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4817b8a970d2012-10-28T03:21:46Z2012-10-28T03:21:46ZDrDickI see you have not read any of those links and still have absolutely no idea what you are talking...<p>I see you have not read any of those links and still have absolutely no idea what you are talking about. Read the OECD reports which specifically refer to increasing inequality (it is even int the titles of some). Better yet read the Saez links, as he is one of the leading experts in the world on inequality. When you learn a marginal bit of coherence and how to construct a logical argument, supported with actual data, we can talk. Until then study up on the links I provided and you might learn something for a change.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0c27e1970c2012-10-28T03:17:59Z2012-10-28T03:17:59ZDrDickOh look what slithered out from under its rock again. Got any data to back up your BS yet, little...<p>Oh look what slithered out from under its rock again. Got any data to back up your BS yet, little Tony? Shall I invoke the holy name of Marx again to send screaming back to the fire pits of your Hayekian hellhole? Come to think of it, given your name, perhaps you or your family were supporters of his hero, the butcher Pinochet.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32dd7738970b2012-10-28T02:51:22Z2012-10-28T02:51:28ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Kyle I wouldn't engage with Dick too much. He's an avowed Marxist (charming in this age) and his asshole quotient...<p>Kyle I wouldn&#39;t engage with Dick too much. He&#39;s an avowed Marxist (charming in this age) and his asshole quotient is about 8/10. Be warned. </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32dd4835970b2012-10-28T02:07:32Z2012-10-28T02:07:32ZKyleYou have to be careful with statistics like wages and household incomes. Wages are not incomes, they are a part...<p>You have to be careful with statistics like wages and household incomes. Wages are not incomes, they are a part of incomes, and as pointed out, wages have been stalled or declining in certain industries over the years due to the rising costs of health insurance, as health insurance is provided through the employer in the U.S. </p>
<p>Household incomes are misleading because they are group measurements and the sizes of households change over time. That the income of households remains the same, goes up, or down, is not indicative of how much money individuals within said household are making. </p>
<p>Note that per capita incomes have continually been increasing year-after-year, with the exception of the major recessions: <a href="http://bber.unm.edu/econ/us-pci.htm" rel="nofollow">http://bber.unm.edu/econ/us-pci.htm</a></p>Goldilocksisableachblode commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32dd466a970b2012-10-28T02:05:51Z2012-10-28T02:05:51ZGoldilocksisableachblodeWell , now I'm absolutely certain about one thing : You're being paid by the word.<p>Well , now I&#39;m absolutely certain about one thing : You&#39;re being paid by the word.</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4811f2b970d2012-10-28T01:58:17Z2012-10-28T01:58:17ZKyle"And they could pay much more. So why not make them? As your own argument suggests, it wouldn't hurt them...<p>&quot;And they could pay much more. So why not make them? As your own argument suggests, it wouldn&#39;t hurt them in the least - they can sit at pretty computers and drink coffee like everybody else. And more people can get more pretty computers, and coffee growers can make more money. <br />
Unless, of course, you have a pathological need for four houses and forty computers and power. In which case, you will naturally use your wealth to bar entry to others who might threaten it.&quot;</p>
<p>Because society is about freedom, and it isn&#39;t free when bureaucrats decide to start stealing the wealth of the productive and giving it to the less-productive in order to cement their own power base (he/she who promises to rob Peter to pay Paul can always depend on the support of Paul). </p>
<p>Also, the government isn&#39;t supposed to tax wealth, only income. <br />
<br />
&quot;So, use your pretty computers and the U.S. postal system and make a nice pretty state funded bank for all, driving down credit costs for the wage class and taking away rents from the wealthy; use your pretty medical technology and hospitals and make health care much more like it is in France, affordable for all; break the intellectual property monopolies. Etc. Heavily taxing the wealthy is a good idea, and no where do you present any arguments that it is a bad idea. But it is only a start. We can be much more equal, and still enjoy all the great stuff. So, this is what we should do. It makes sense for the vast majority, and will hurt a slight minority, who won&#39;t really be hurt in their real lifestyles - unless not having the vacation house in Aspen is really a major existential pain. But hell, even in the great 60s, when taxes were sky high on the wealthy, the wealthy could afford those vacation houses -they just had to leap higher.&quot;</p>
<p>1) &quot;Pretty computers&quot; and coffee are just one example. But the amount of goods and services altogether, ranging from the obvious like Reeboks and Nikes to computers, iPads, iPods, premium coffees, to new, better-quality, and cheaper medical devices and medical technologies, new manufacturing technologies, new technologies that allow industry to be cleaner and safer, technologies that have greatly improved the productivity and output of agriculture, new chemicals, etc...all added together, have dramatically increased the standard of living for the average person.</p>
<p>Remember, the real wealth of society is the goods and services it produces. The more goods/services that are available to the ordinary person, the wealthier they are. </p>
<p>2) The European nations like France are facing a major fiscal crisis right now. To the extent they were ever able to afford their massive entitlement states, they only could due to their not having to spend much of anything on defense, because the United States has been protecting them for 60+ years. Even the countries like Germany and the Scandinavian countries that are fairly healthy financially still would face a major problem if they had to spend proportionally on defense what the U.S. does (and Norway gets 25% of its GDP from oil exports).</p>
<p>3) The European nations do not get the money to finance their social welfare states via taxing the rich, they get them by taxing the middle-class and the poor via what&#39;s called a VAT (&quot;Value Added Tax,&quot; an Orwellian name if there ever was one). A VAT taxes every stage of the production and distribution of the goods and services in an economy. It is a hidden tax, so politicians like it a lot.</p>
<p>3) A &quot;state-funded bank?&quot; You really think a state-run operation wouldn&#39;t fall prey to extreme corruption? The United States tried two state-run central banks before the current third attempt with the Federal Reserve, having to shut down both as they were so plagued with corruption.</p>
<p>4) Healthcare in France and other Euro countries still comes at a cost, however the German, French, Swiss, and Netherlands healthcare systems are among the best universal healthcare systems in the world. </p>
<p>However, they are not government-run systems as many think universal healthcare is. They are combinations of both public and private elements. Government-run universal healthcare systems are generally not the ideal form of universal healthcare.</p>
<p>I would not have a problem in trying to create a form of universal healthcare system in the U.S. that is modeled on one of those systems. </p>
<p>5) Heavily taxing the wealthy is both morally wrong, as you are stealing other people&#39;s wealth and giving it to people who did not earn it, and also the wealthy will leave the country. Wealth taxes have never worked; in Europe, where they have experimented with them, they always have backed off. </p>
<p>I don&#39;t know about you, but society is not supposed to be where if you work hard and become successful, that everyone else gets entitled to the fruits of your labor, which is essentially what you are saying. That is affects a minority is meaningless. Society is supposed to protect the rights of everybody. The idea that you can just steal from someone because &quot;they won&#39;t miss it&quot; is wrong.</p>
<p>And as said, all it will allow is power-hungry politicians to cement their power-base. It also affects the structural fabric of society, because the people, as opposed to being self-reliant, free-thinking adults, begin to become the equivalent of adolescent children. See Greece and Spain, France and Italy where the people have a tendency to riot over certain entitlement cuts. </p>
<p>7) Taxes were never sky-high for the wealthy in the 1950s or the 1960s except on paper. Via loopholes, no one paid those amounts, and instead hid their money. One of the things that helped the economy recover in the 1980s was the reducing of the tax rates which then incentivized people to invest their money in the stock and bond markets. England experienced a severe drop off in investment when Labor raised the top tax rates well in the 90s in the 1970s. </p>
<p>Such high taxes do have the negative affect of hurting the middle-class and the poor though by killing off investment and job creation, which would otherwise occur if the affluent invest their money. </p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47f924a970d2012-10-27T19:56:51Z2012-10-27T19:56:51ZDrDickHave you ever even visited the planet earth? This is just sad and pathetic. Here is a brief start on...<p>Have you ever even visited the planet earth? This is just sad and pathetic. Here is a brief start on learning about reality:</p>
<p><a href="http://www.oecd.org/els/socialpoliciesanddata/dividedwestandwhyinequalitykeepsrising.htm" rel="nofollow">http://www.oecd.org/els/socialpoliciesanddata/dividedwestandwhyinequalitykeepsrising.htm</a><br />
<a href="http://www.oecd.org/els/socialpoliciesanddata/growingunequalincomedistributionandpovertyinoecdcountries.htm" rel="nofollow">http://www.oecd.org/els/socialpoliciesanddata/growingunequalincomedistributionandpovertyinoecdcountries.htm</a><br />
<a href="http://elsa.berkeley.edu/~saez/TabFig2010.xls" rel="nofollow">http://elsa.berkeley.edu/~saez/TabFig2010.xls</a><br />
<a href="http://www.columbia.edu/~wk2110/uncovering/" rel="nofollow">http://www.columbia.edu/~wk2110/uncovering/</a><br />
<a href="http://www.nber.org/digest/oct06/w11955.html" rel="nofollow">http://www.nber.org/digest/oct06/w11955.html</a><br />
<a href="http://scholar.google.com/scholar?q=inequality+rising+us&hl=en&as_sdt=0&as_vis=1&oi=scholart&sa=X&ei=ZTuMULaSBIe6iwKFtoDABg&ved=0CBoQgQMwAA" rel="nofollow">http://scholar.google.com/scholar?q=inequality+rising+us&amp;hl=en&amp;as_sdt=0&amp;as_vis=1&amp;oi=scholart&amp;sa=X&amp;ei=ZTuMULaSBIe6iwKFtoDABg&amp;ved=0CBoQgQMwAA</a></p>
<p>You are welcome.</p>Roger Gathman commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0a3f0e970c2012-10-27T19:47:33Z2012-10-27T19:47:33ZRoger Gathmanhttp://www.limitedinc.blogspot.comAnd they could pay much more. So why not make them? As your own argument suggests, it wouldn't hurt them...<p>And they could pay much more. So why not make them? As your own argument suggests, it wouldn&#39;t hurt them in the least - they can sit at pretty computers and drink coffee like everybody else. And more people can get more pretty computers, and coffee growers can make more money. <br />
Unless, of course, you have a pathological need for four houses and forty computers and power. In which case, you will naturally use your wealth to bar entry to others who might threaten it. <br />
So, use your pretty computers and the U.S. postal system and make a nice pretty state funded bank for all, driving down credit costs for the wage class and taking away rents from the wealthy; use your pretty medical technology and hospitals and make health care much more like it is in France, affordable for all; break the intellectual property monopolies. Etc. Heavily taxing the wealthy is a good idea, and no where do you present any arguments that it is a bad idea. But it is only a start. We can be much more equal, and still enjoy all the great stuff. So, this is what we should do. It makes sense for the vast majority, and will hurt a slight minority, who won&#39;t really be hurt in their real lifestyles - unless not having the vacation house in Aspen is really a major existential pain. But hell, even in the great 60s, when taxes were sky high on the wealthy, the wealthy could afford those vacation houses -they just had to leap higher. </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47f7496970d2012-10-27T19:29:33Z2012-10-27T19:29:33ZKyle"Equality has different dimensions, and though it is evident that all forms of inequality have grown in America's dire plutocratic...<p>&quot;Equality has different dimensions, and though it is evident that all forms of inequality have grown in America&#39;s dire plutocratic phase, rightwing obscurantism is not necessarily unhelpful.&quot;</p>
<p>What forms of inequality have grown? And if so dire, then why are such times remembered as among the the country&#39;s most prosperous times? I agree on the issues of public infrastructure and refrigeration (refrigeration an example of news goods/ services becoming available). </p>
<p>&quot;Those rightwingers who claim inequality no longer exists undermine the incentive for wealth accumulation itself - in their world view, it becomes a sort of psychosis, and we are helping the rich by taking away their money - giving them an incentive to do something useful and less obsessive.&quot;</p>
<p>I&#39;m not claiming, and I don&#39;t know of anyone on the right, who is claiming that inequality doesn&#39;t exist. The argument is that inequality is at one of the lowest points in human history. But of course inequality exists. </p>
<p>&quot;But in fact, the rich aren&#39;t as psychotic as the rightwingers pretend. You can buy amazing things with money which you can&#39;t acquire without it. And of course this is all aggravated by the stupid way healthcare has become a combination of guild monopolies, government backed private tech monopolies, and a commercial business.&quot;</p>
<p>Well some of that I&#39;d say is inadverdently due to the policies leftists argue for in order to protect the consumer. For example, medical licensing. This allows the American Medical Association to artificially limit the supply of doctors and thus drive up their cost. And then regulations. Pharmaceuticals is dominated by a few large, powerful companies because the industry is so regulated.</p>
<p>Now I&#39;m not arguing to get rid of licensing or regulation, just making a point that guilds and cartels can be side effects from such policies. </p>
<p>&quot;It is very true that we can&#39;t stop in trying to make the wealthy pay a higher share of taxes. We have to undertake deep reforms to prevent wealth accumulation of the form that it has taken in the Great moderation - period. Radically reforming the banks, the credit system, the way R and D has been privatized - all of this is necessary to realize a more equal and comfortable society, under the motto, we all are rich. Cause we all really are.</p>
<p>Why is wealth accumulation bad though? It just means a lot of new fortunes have been created (which is what has led to the more equal and comfortable society for everyone). And it is just a statistical bracket where said wealth accumulation has formed. Said wealth accumulation occurs because of all the new goods and services that have been introduced over the past thirty years (those goods/services make society as a whole richer, not just the people producing them---for example, we&#39;re all a little richer because of having access to Google, as it&#39;s a good/service that previously didn&#39;t exist). </p>
<p>We know the big ones: Apple, Google, Facebook, Microsoft, Amazon, Starbucks, innumerable smaller companies, and the massive increases in productivity in the economy gained as well which have eneabled smaller businesses to thrive. For example, I can sit at my computer, right now drinking a luxurious coffee, with access to the world&#39;s knowledge and arts in front of me (books, music, movies, television, etc...) via the Internet. All of these capabilities have a fortune (or a few) tied to them. </p>
<p>Also remember that &quot;the wealthy,&quot; if looked at as a statistical bracket, already pay a large share of society&#39;s tax revenue.</p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0a1405970c2012-10-27T19:08:21Z2012-10-27T19:08:21ZKyleI have no problem with arguments that seek to show individual people are not seeing incomes rise. I will check...<p>I have no problem with arguments that seek to show individual people are not seeing incomes rise. I will check the work of those you cited. I do have problems however with the arguments that over-simplify and distort the issue by talking about income inequality and acting as if what are statistical brackets are fixed classes of people and acting as if income is something that exists in a pre-existing fixed pie or something. </p>
<p>While professionals studying the subject may deal with those, many arguing about income inequality do not address those and it misleads people. </p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47eae65970d2012-10-27T16:24:38Z2012-10-27T16:24:38ZDrDickYou mean arguments like yours then.<p>You mean arguments like yours then.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47e7125970d2012-10-27T15:30:54Z2012-10-27T15:30:54ZDrDickMy, how civil and rational of you. I love you, too. To clarify my previous post a bit here, while...<p>My, how civil and rational of you. I love you, too.</p>
<p>To clarify my previous post a bit here, while I do think that capital (more precisely concentration of capital) distorts the economy and creates excessive inequality, it is not so much capital per se that is the problem, as it is the greed of capital today. I am old enough to remember when it was different, capital accepted more modest returns on investment, executive compensation was more modest, and prosperity was more widely distributed in society. These last three are clearly linked.</p>
<p>On the “productivity” of capital, capital produces nothing except rents (interest, dividends, profits, etc.), but can contribute to increasing the productivity of *labor* through capital investment in technology and mechanization, which is what the report you cited alludes to. What this does, however, is reduce the need for labor while upgrading the skills required (and value) of labor, which should lead to fewer, better paid manufacturing workers. This is not what we see. Manufacturing employment does fall (<a href="http://aneconomicsense.com/2012/07/15/employment-in-manufacturing-parties-do-matter/" rel="nofollow">http://aneconomicsense.com/2012/07/15/employment-in-manufacturing-parties-do-matter/</a> ), but wages are largely flat during the period of greatest mechanization (<a href="http://midwest.chicagofedblogs.org/archives/2012/02/manufacturing_w_2.html" rel="nofollow">http://midwest.chicagofedblogs.org/archives/2012/02/manufacturing_w_2.html</a> ). US manufacturing wages are now lower than most of Europe, though higher than Japan (<a href="http://av.r.ftdata.co.uk/files/2012/04/120404-manu-10.jpg" rel="nofollow">http://av.r.ftdata.co.uk/files/2012/04/120404-manu-10.jpg</a> ). Most of this discrepancy can be attributed to offshoring manufacturing jobs to low wage countries (<a href="http://www.shsu.edu/~eco_www/resources/documents/Hsu.pdf" rel="nofollow">http://www.shsu.edu/~eco_www/resources/documents/Hsu.pdf</a> ).</p>
<p>The savings from lower labor costs are not passed on to consumers (<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.bls.gov%2Ffls%2Fintl_consumer_prices.xls&ei=7faLUOqpM6KNigKckYCoAQ&usg=AFQjCNG0kMxsJyurNtjTA2-yHcHHrL1_pw" rel="nofollow">http://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CCEQFjAA&amp;url=http%3A%2F%2Fwww.bls.gov%2Ffls%2Fintl_consumer_prices.xls&amp;ei=7faLUOqpM6KNigKckYCoAQ&amp;usg=AFQjCNG0kMxsJyurNtjTA2-yHcHHrL1_pw</a> ) or primarily invested in capital improvements and R&amp;D (<a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.17.9558&rep=rep1&type=pdf" rel="nofollow">http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.17.9558&amp;rep=rep1&amp;type=pdf</a> ), but diverted to executive compensation and investors (<a href="http://247wallst.com/2012/09/26/income-inequality-predicted-to-rise/" rel="nofollow">http://247wallst.com/2012/09/26/income-inequality-predicted-to-rise/</a> ). Average CEO compensation in the 1965 was about 18 times that of the average worker. Today it is 209 times ( <a href="http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/" rel="nofollow">http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/</a> ) a1161% increase. That increase is entirely rents.</p>EMIchael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32da547e970b2012-10-27T14:38:52Z2012-10-27T14:38:52ZEMIchael"What would be legitimate arguments would be if large numbers of individual people are not seeing their incomes increase." Truly...<p>&quot;What would be legitimate arguments would be if large numbers of individual people are not seeing their incomes increase.&quot;</p>
<p>Truly amazing. A sentence that makes sense(but then of course you follow it up with inane rtamblings).</p>
<p>Check Picketty and Saez&#39;s work. Check Noah&#39;s work. They have been linked in here many times.</p>
<p>And then realize that the &quot;legitimate arguments&quot; have been presented for quite awhile, and are not disputed by any one who cares to think about the subject.</p>EMIchael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d08e803970c2012-10-27T14:35:11Z2012-10-27T14:35:11ZEMIchaelI have no official count as to how many brain cells I lost reading your post the first time, I...<p>I have no official count as to how many brain cells I lost reading your post the first time, I just know it was a lot.</p>
<p>At my age, I cannot afford to lose many, and responding to a couple hundred words of a billymadison worthy rant would certainly kill millions more.</p>
<p>Sometimes people just have to be totally ignored. </p>Roger Gathman commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d07f992970c2012-10-27T10:50:26Z2012-10-27T10:50:26ZRoger Gathmanhttp://www.limitedinc.blogspot.comEquality has different dimensions, and though it is evident that all forms of inequality have grown in America's dire plutocratic...<p>Equality has different dimensions, and though it is evident that all forms of inequality have grown in America&#39;s dire plutocratic phase, rightwing obscurantism is not necessarily unhelpful. Kyle&#39;s sweep of history is a good case in point. It is wrongheaded, but it is good to pick apart such things so as to see why they are wrongheaded. <br />
Take healthcare (and I use this because melding everything together as &#39;consumption&#39; obscures the different modes of consumption). In 100 B.C., the Roman praetor may have had a juridical inequality that overwhelmed his slave. But because both were living at a time when there was not a large grasp of the cause of diseases, for the most part they had equal healthcare chances once they made it past childhood. That is because the slave, using folk medicine, and the praetor, using professional medicien, were both using incomplete and often wrong healthcare advice and practice. <br />
Even so, Rome and other ancient cities had already discovered one of the great factors in good healthcare - public infrastructure. In Europe and the U.S., it was the state, building sewers, creating water systems that carried water to all dwellings, inspecting food, etc., that created the revolution in healthcare. Queen Victoria&#39;s children and the children of costermongers both benefited when they could enjoy running water. This had widespread effects. For instance, decades before drugs were developed to cure tuberculosis, the rate of tuberculosis had plummetted.<br />
There were, as well, unexpected results of private ingenuity. The development of good refrigeration and the marketing of refrigerators had a strong effect on the cancer landscape, for instance, in the U.S. In 1900, stomach cancer was the cancer from which more people died than any other. But the incidence in the States collapsed over the course of the twentieth century, because of the refrigerator and the refrigerated car. </p>
<p>As the cause of diseases were discovered, and cures were discovered, then the old reason for the equality between those who could afford professional care and those who couldn&#39;t vanished. Or it did in many ways. Money could buy you much better health care - which is one of the reasons you want a lot of money. Those rightwingers who claim inequality no longer exists undermine the incentive for wealth accumulation itself - in their world view, it becomes a sort of psychosis, and we are helping the rich by taking away their money - giving them an incentive to do something useful and less obsessive. But in fact, the rich aren&#39;t as psychotic as the rightwingers pretend. You can buy amazing things with money which you can&#39;t acquire without it. And of course this is all aggravated by the stupid way healthcare has become a combination of guild monopolies, government backed private tech monopolies, and a commercial business. </p>
<p>It is very true that we can&#39;t stop in trying to make the wealthy pay a higher share of taxes. We have to undertake deep reforms to prevent wealth accumulation of the form that it has taken in the Great moderation - period. Radically reforming the banks, the credit system, the way R and D has been privatized - all of this is necessary to realize a more equal and comfortable society, under the motto, we all are rich. Cause we all really are.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d06c47e970c2012-10-27T06:03:01Z2012-10-27T06:03:08ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Dick, fuck off. We're done, pal. Have a great life.<p>Dick, fuck off. We&#39;re done, pal. Have a great life.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d06b8c3970c2012-10-27T05:53:52Z2012-10-27T05:54:03ZDrDickYou really are an idiot. All profit is rents (unearned income from ownership of property). Capital is not more productive...<p>You really are an idiot. All profit is rents (unearned income from ownership of property). Capital is not more productive (indeed it is incapable of productivity as both Marx and Adam Smith observed), it is actively engaged in rent seeking in ways and to degrees it did not do during the 1950s and 1960s. Globalization is largely driven by rent seeking as corporations actively seek out the lowest possible labor costs. The resultant savings are not mostly passed on to consumers as lower prices, but rather extracted as rents passed on to the top 20%. Yes, capital is the problem, which feeds off the workers and creates poverty for its own enrichment, and yes, I am a Marxist. </p>
<p>This kind of behavior is neither necessary nor inevitable. The Mondragon Corporation proves that there is a viable and dynamic alternative. They are a socialist syndicalist cooperative which is wholly owned by the employees, who share directly in all profits, and where the top executives make less than ten times as much as the lowest paid worker. they are also a multi-billion dollar multinational company and the 7th largest company in Spain ( <a href="http://www.mondragon-corporation.com/language/en-US/ENG/Who-we-are/Introduction.aspx" rel="nofollow">http://www.mondragon-corporation.com/language/en-US/ENG/Who-we-are/Introduction.aspx</a> ). This is actually what Marx envisioned and my vision for the future of the world.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d067b44970c2012-10-27T04:59:56Z2012-10-27T05:00:04ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Umm, no. Dick, you're now unequivocally saying that capital makes the poor poorer. This is an argument eating its own...<p>Umm, no.</p>
<p>Dick, you&#39;re now unequivocally saying that capital makes the poor poorer. This is an argument eating its own tail.</p>
<p>Capital has become more productive than labor at the margin. Hence, capital continues to displace labor as regards the US labor income share--a phenomenon ongoing since the 1980s or so.</p>
<p>Here are some stated reasons WHY this is occurring:</p>
<p>&quot;Economists have identified three long-term factors that can explain why the wage-productivity gap has widened and the share of income accruing to labor has declined. The first is the decrease in the bargaining power of labor, due to changing labor market policies and a decline of the more unionized sectors. Another factor is increased globalization and trade openness, with the resulting migration of relatively more labor-intensive sectors from advanced economies to emerging economies. As a consequence, the sectors remaining in the advanced economies are relatively less labor-intensive, and the average share of labor income is lower as compared to capital. The third factor is technological change connected with improvements in technology, which has raised the marginal productivity and return to capital relative to labor.&quot;</p>
<p>Capital displaces more low skilled jobs than higher-skilled jobs. So here, CAPITAL is your REAL boogeyman.</p>
<p>Now it appears, your beef seems to be that because capital OWNERSHIP is concentrated with the wealthy, that the wealthy are rent-seekers, expropriating from poorer laborers. We are blaming the capital, and its owners. God, you are channeling Marx in frightening fashion.</p>
<p>The only solution to the above is of course, a redistribution of capital:</p>
<p><a href="http://en.wikisource.org/wiki/Das_Kapital/Chapter_25" rel="nofollow">http://en.wikisource.org/wiki/Das_Kapital/Chapter_25</a></p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d05e403970c2012-10-27T02:58:31Z2012-10-27T05:54:04ZKyleUsing what are statistical brackets to argue about supposed "income inequality" has to be one of the all-time most ridiculous...<p>Using what are statistical brackets to argue about supposed &quot;income inequality&quot; has to be one of the all-time most ridiculous arguments ever advanced. </p>
<p>What would be legitimate arguments would be if large numbers of individual people are not seeing their incomes increase. But statistical brackets do not represent such people. Most people move into higher income brackets over time. Thus how much of &quot;the income&quot; (another false metric) a particular bracket makes over time is meaningless. It is not at all representative of the actual people in society. </p>
<p>It would be like if you looked at the statistics of the &quot;Slowest 10%&quot; and the &quot;Fastest 10%&quot; of cars on the Interstate. While there is always a Slowest 10% and a Fastest 10%, those statistics do not represent the actual, physical cars driving on the Interstate each day. </p>
<p>Wages have been stalled in some industries, or even declining, in recent years, but that is a good deal due to the rising costs of health insurance, and thus more and more of a person&#39;s income having to go towards paying for health insurance, not due to policies such as low taxes. </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47b19a2970d2012-10-27T02:49:21Z2012-10-27T05:54:04ZKyleThe arguments that get picked apart constantly are the nonsensical arguments about "income inequality" and "the 1%" and so forth.<p>The arguments that get picked apart constantly are the nonsensical arguments about &quot;income inequality&quot; and &quot;the 1%&quot; and so forth. </p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47b165e970d2012-10-27T02:46:51Z2012-10-27T05:54:04ZDrDickYou do realize that paper actually supports what I said, don't you? As for all the gains going to "capital",...<p>You do realize that paper actually supports what I said, don&#39;t you? As for all the gains going to &quot;capital&quot;, who the hell do you think capital is? The top 1% (contained in the top 5 %, but not shown separately on the graph I linked to) own 42% of all capital wealth, while the top quintile own over 95% of capital ( <a href="http://www2.ucsc.edu/whorulesamerica/power/wealth.html" rel="nofollow">http://www2.ucsc.edu/whorulesamerica/power/wealth.html</a> ). At the same time, as they point out, the labor share of income has declined sharply over the past 30 years and the GINI Coeficient has risen dramatically. It currently stands at 45, making it worse than Cameroon and Guyana, though slightly better than Uruguay and Bulgaria. The rest of the OECD is dramatically lower ( <a href="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html" rel="nofollow">https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html</a> ).</p>
<p>See also: <a href="http://www.verisi.com/resources/us-income-inequality.htm" rel="nofollow">http://www.verisi.com/resources/us-income-inequality.htm</a></p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47b1649970d2012-10-27T02:46:49Z2012-10-27T05:54:04ZKyleThe fact that no one has any kind of real response to my argument except for insults is all I...<p>The fact that no one has any kind of real response to my argument except for insults is all I need to see. Again, the entire argument of so-called &quot;inequality&quot; given by the left is utter nonsense.</p>anne commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47a5d68970d2012-10-27T00:37:00Z2012-10-27T00:37:00ZanneNot to interfere, but there is no need to vilify the highest income group only to show there are large...<p>Not to interfere, but there is no need to vilify the highest income group only to show there are large and increasing differences in income and a need to show the social problems that result from large and increasing differences in income.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d050341970c2012-10-27T00:15:41Z2012-10-27T00:15:45ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Actually Dick, the GAINS have gone mostly to capital. (Your snobbishness is tiresome BTW.) I see the game you want...<p>Actually Dick, the GAINS have gone mostly to capital. (Your snobbishness is tiresome BTW.)</p>
<p>I see the game you want to play. We&#39;ll forget your smoking gun: the CRS showed a correlation, and you concreted (reaffirmed) a causal inference in your mind. When all you have is a hammer, everything looks like a nail. Ok.</p>
<p>Here&#39;s a fun piece for you to read. It&#39;s from the Fed, and might open-up the discussion a tad. I know you already know the rich are causing the poor to be poor, but humor me. Let&#39;s broaden our very pedantic horizons:</p>
<p><a href="http://www.clevelandfed.org/research/commentary/2012/2012-13.pdf" rel="nofollow">http://www.clevelandfed.org/research/commentary/2012/2012-13.pdf</a></p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47a2ba8970d2012-10-26T23:59:31Z2012-10-26T23:59:31ZDrDickAlmost all of the gains in income share over the past 35 year has gone to the top quintile and...<p>Almost all of the gains in income share over the past 35 year has gone to the top quintile and particularly to the top 5%. <a href="http://www.oftwominds.com/blogmay12/debt-serfdom5-12.html" rel="nofollow">http://www.oftwominds.com/blogmay12/debt-serfdom5-12.html</a></p>
<p>Do come back when you have some actual data. Until then all you have is BS.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d61203970b2012-10-26T23:02:41Z2012-10-26T23:02:50ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Dick, but don't you understand that using your mental 'model', even those in the middle class (let's say the third...<p>Dick, but don&#39;t you understand that using your mental &#39;model&#39;, even those in the middle class (let&#39;s say the third quintile) are &#39;taking&#39; from those in the lowest class (the lower fifth)? In your model, any person who experiences real income growth equal to or greater than average labor productivity growth, &#39;takes&#39; from someone who doesn&#39;t enjoy this phenomenon. </p>
<p>Conveniently, you focus on the 1% or 5% or whatever, because it&#39;s easier to demonize the rich. But truth be told, your argument holds when comparing certain people in the middle class, with most people in the bottom 10%!</p>
<p>And I agree we should talk &#39;through&#39; the literature. But you must not reference papers from unaffiliated persons sitting in their boxer shorts, uploading to SSRN and blogging about the &#39;right&#39; to not be poor. Let&#39;s do QUALITY sources (I can even handle the occasional partisan think tank). I&#39;ll try to do the same.</p>
<p>While I&#39;ve admittedly forgotten the original topic (the ad hominens are a distraction) I&#39;ll try to refocus.</p>
<p>Now, you are keenly interested in the &#39;finding&#39; that the top 1% tax rate is uncorrelated with GDP/productivity growth in the U.S. I responded that ALL tax rates, for all income groups, are uncorrelated as regards a GDP/productivity regression.</p>
<p>Are you willing to grant this premise?</p>
<p></p>
<p><br />
</p>reason commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0422a4970c2012-10-26T21:14:45Z2012-10-26T21:14:45ZreasonI can tell you probably weren't actually around in the 70s.<p>I can tell you probably weren&#39;t actually around in the 70s.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d042224970c2012-10-26T21:14:28Z2012-10-26T21:14:28ZDrDickActually, you are the one who has clearly made up his mind and is determined to ignore all evidence to...<p>Actually, you are the one who has clearly made up his mind and is determined to ignore all evidence to the contrary. Mark, I and others have provided evidence to back up our statements. You have not, but just make unsupported assertions with no data. You do not even have Google to back you up. Until you provide data and studies to back it up, your comments are all BS and propaganda. My statements are supported with evidence, while yours are not.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d039358970c2012-10-26T19:35:08Z2012-10-26T19:35:14ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Dick I know you made your mind up 20 years ago (or more) on these matters--all that's left now is...<p>Dick I know you made your mind up 20 years ago (or more) on these matters--all that&#39;s left now is using Google to support your conclusions. Keep what fits, ignore what doesn&#39;t! Google is a brilliant confirmation bias device.</p>
<p>But I&#39;m not deterred; you and I can still have some nice talks.</p>
<p>Same with you, Goldi. I&#39;m especially looking fwd to learning &#39;truth&#39; from you.</p>Goldilocksisableachblonde commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee478b70d970d2012-10-26T19:17:17Z2012-10-26T19:17:17ZGoldilocksisableachblondeYou're correct that our current numbers are not yet banana-republic quality , but if you look at long-term trends ,...<p>You&#39;re correct that our current numbers are not yet banana-republic quality , but if you look at long-term trends , it sure looks like we&#39;re trying to join that club :</p>
<p><a href="http://en.wikipedia.org/w/index.php?title=File:Gini_since_WWII.svg&page=1" rel="nofollow">http://en.wikipedia.org/w/index.php?title=File:Gini_since_WWII.svg&amp;page=1</a></p>
<p><br />
On a related measure of banananess , top 1% income share , we also have bragging rights among the advanced economies :</p>
<p><a href="http://www.derechos.org/nizkor/econ/oecd15.jpg" rel="nofollow">http://www.derechos.org/nizkor/econ/oecd15.jpg</a></p>
<p>That distinction also suggests that there&#39;s more that can be done on the tax side in addressing inequality . When someone like Romney can get away with a sub-15% federal tax rate for years on end , it&#39;s pretty clear we haven&#39;t exhausted that avenue.</p>
<p>Dylan Matthews posted a graph indicating how we&#39;ve done in post-tax/transfer inequality reduction , compared to what we would have needed to maintain 1979 levels :</p>
<p><a href="http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/gini_change_taxes_transfers.jpg" rel="nofollow">http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/gini_change_taxes_transfers.jpg</a></p>
<p>He then shows how our current efforts at gini reduction , along with the needed &quot;maintenance&quot; levels mentioned above , compare to other advanced countries :</p>
<p><a href="http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/oecd_crosscountry_crossyear.jpg" rel="nofollow">http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/oecd_crosscountry_crossyear.jpg</a></p>
<p>Bottom line , and consistent with the Kenworthy graph mentioned earlier : We lag badly in efforts to reduce inequality compared to our peers.</p>
<p><a href="http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/oecd_country_comparison2.jpg" rel="nofollow">http://www.washingtonpost.com/blogs/ezra-klein/files/2012/08/oecd_country_comparison2.jpg</a></p>
<p>source article :</p>
<p><a href="http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/06/how-much-can-taxes-curb-inequality/" rel="nofollow">http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/06/how-much-can-taxes-curb-inequality/</a></p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d036013970c2012-10-26T19:03:00Z2012-10-26T19:03:00ZDrDickWe warned him about the brown acid, but would he listen?<p>We warned him about the brown acid, but would he listen?</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4789f79970d2012-10-26T19:02:33Z2012-10-26T19:02:33ZDrDickNo, just a realistic assessment of what you are doing, given that you never provide any kind of evidence to...<p>No, just a realistic assessment of what you are doing, given that you never provide any kind of evidence to back up your assertions and merely mouth shopworn rightwing platitudes. You clearly are not arguing in good faith, but are engaged in a propaganda campaign. I am not as convinced as Goldi that you are working on behalf of a political party or candidate, generally considering you simply another delusional libertarian zealot trying to convert the world.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d4c318970b2012-10-26T18:56:58Z2012-10-26T18:56:58ZDrDickYes, that is in fact the case given a fixed quantity of value in the economy at any given time...<p>Yes, that is in fact the case given a fixed quantity of value in the economy at any given time (which is the reality). Let us use the pie analogy. If you take a proportionally larger piece of the pie, then there is less available for everybody else, even if the pie is growing. Remember that the economy is inherently finite and thus one group taking a larger portion impoverishes the rest.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4788d38970d2012-10-26T18:51:26Z2012-10-26T18:51:31ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749So Dick per your post, you do indeed believe that via rent-seeking (or other means), the rich make the poor,...<p>So Dick per your post, you do indeed believe that via rent-seeking (or other means), the rich make the poor, poorer? Do I have that right? Meaning, the rich CAUSE the poor to be poorer?</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d0332ef970c2012-10-26T18:31:54Z2012-10-26T18:31:54ZDrDickNo, EMichael is completely correct about the irrelevance of your analogy. If, as he has done, you are looking to...<p>No, EMichael is completely correct about the irrelevance of your analogy. If, as he has done, you are looking to explain why worker compensation has remained flat while productivity has increased, even though the two had tracked quite closely for 30 years, then looking at the fact that executive compensation and income to the top 1% has skyrocketed during this period is completely relevant. In much the same way that trying to explain why some populations get sickle cell and others do not requires looking at both groups and what factors might influence this disparity. In the case of sickle cell, it is the presence or absence of falciparum malaria in the environment, and in the case of productivity and wages, the most likely answer is excessive rent seeking by the wealthy at the expense of the workers. This is particularly true given the fact that there was considerable technological improvement during the 30 years that wages tracked closely with productivity. Also, sickle cell is not concentrated in blacks (its highest incidence is in parts of Greece), but correlates with endemic falciparum malaria ( <a href="http://en.wikipedia.org/wiki/Sickle-cell_disease" rel="nofollow">http://en.wikipedia.org/wiki/Sickle-cell_disease</a> ). If you want to challenge the posts and our points, you need to present countervailing data. It is not our responsibility to convince you that the post or the data we provide is correct, it is your reponsibility to present data that calls that into question, which you never do.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47857b3970d2012-10-26T18:13:51Z2012-10-26T18:51:31ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749You sound a tad paranoid, Goldi. Take the aluminum foil off your head. (Beware the right wing conspiracies!) It's telling...<p>You sound a tad paranoid, Goldi. Take the aluminum foil off your head. (Beware the right wing conspiracies!)</p>
<p>It&#39;s telling that you steadfastly reiterate that your mind cannot be changed! A Tea Partier mentality in photo-negative.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d44a6c970b2012-10-26T17:31:51Z2012-10-26T17:31:51ZDrDickThe question under discussion is about top marginal rates, so once again you are dodging the issue. You also remain...<p>The question under discussion is about top marginal rates, so once again you are dodging the issue. You also remain as fact free as ever. When you start providing data and studies to back up your assertions, then I will engage you again. Until then you are simply a troll. </p>
<p>BTW, your chart did not show what you asserted it did, as it showed no correlation between tax rates and productivity. Indeed, high tax Norway and Luxemburg outperform the US in productivity in that chart.</p>Goldilocksisableachblonde commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee478024b970d2012-10-26T17:15:09Z2012-10-26T17:15:09ZGoldilocksisableachblondeNo , I really just hate to see posters like you and Kyle waste your time like this. You both...<p>No , I really just hate to see posters like you and Kyle waste your time like this. You both make ridiculously facile arguments that have been picked apart hundreds , if not thousands , of times on this site.</p>
<p>Posters like you arrive in waves , typically prior to elections or during legislative debates of importance to the plutocrats , and then you roll back out to sea again. Most of us suspect that these waves are not spontaneous , but rather that they&#39;re coordinated , and compensated as well.</p>
<p>Knock yourself out , though. In a way , I suppose it&#39;s better than you expend your efforts here , because it will be for naught. With the right audience ( i.e. one that&#39;s sufficiently stupid ) , you guys could do real damage.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d3e009970b2012-10-26T16:32:19Z2012-10-26T16:35:55ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749I know interpreting analogy is hard for some. But epidemiology is one of the easiest to understand forms of scientific...<p>I know interpreting analogy is hard for some. But epidemiology is one of the easiest to understand forms of scientific inquiry--it&#39;s intuitive to many.</p>
<p>Thought you might have the apparatus to make the connection. My bad.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d3d1e4970b2012-10-26T16:27:15Z2012-10-26T16:35:55ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749I told you Dick, the 2nd paper focuses ONLY on top rates--more of the same straw man BS. (Also, the...<p>I told you Dick, the 2nd paper focuses ONLY on top rates--more of the same straw man BS. (Also, the author is an unaffiliated wierdo. Any dummy can upload to SSRN. Come on, pass-on some quality stuff!)</p>
<p>The CRS report likewise focuses only on top rates, while ignoring other tax brackets that would demonstrate the SAME outcomes--zero sensitivity as regards changes in various tax rates to changes in GDP/productivity. This phenomenon makes the top-rate finding meaningless!</p>
<p>More compelling: show me that median tax rates have statistical correlation to GDP in the US; and then show me the 1% is uncorrelated. This finding would at least inspire further analysis. If you have this, pass it along.</p>
<p>I truly am interested in scientific inquiry. You are interested in realizing (and supporting) your conception of a more just society. Good for you.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d34f4a970b2012-10-26T14:59:21Z2012-10-26T14:59:21ZDrDickNicely dodging issue and avoiding addressing the second, scholarly paper whose results confirm the CRS conclusions. Again, you clearly demonstrate...<p>Nicely dodging issue and avoiding addressing the second, scholarly paper whose results confirm the CRS conclusions. Again, you clearly demonstrate a lack of scholarly aptitude and a preference to cherry pick the tiny fraction of studies (mostly by rightwing propaganda mills) that confirm your biases.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d01e7c3970c2012-10-26T14:56:03Z2012-10-26T14:56:03ZDrDickObviously facts and data bore you, since they do not confirm your delusional ideology. Your faux concern trolling is also...<p>Obviously facts and data bore you, since they do not confirm your delusional ideology. Your faux concern trolling is also duly noted, though I would note that it is you who is hostile to reality and any data which challenges your warped world view. I strongly suggest you go in for a mental health examination as you seem to be rejecting reality.</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d318ea970b2012-10-26T14:21:24Z2012-10-26T14:21:24ZEMichaelTim Noah embarrasses Hassett and Mathur, not to mention a couple of posters in here. "Kevin Hassett and Aparna Mathur’s...<p>Tim Noah embarrasses Hassett and Mathur, not to mention a couple of posters in here.</p>
<p><br />
&quot;Kevin Hassett and Aparna Mathur’s op-ed in today’s Wall Street Journal (“Consumption and the Myths of Inequality”) is an exercise in denialism that makes me nostalgic for the days when the right forthrightly advocated social Darwinism. Yes, conservatives used to say, life is hard for many people, but that’s because they have little to contribute to society. Rather than rail against inequality, these mental pygmies should work to unfetter John Galt-like mental giants, without whose wealth creation their puny lives would be punier still. This worldview wasn’t very nice, but at least it acknowledged a recognizable social reality: a few people had a lot and a lot of people had very little.&quot;</p>
<p><a href="http://www.tnr.com/blog/plank/109157/conservative-inequality-denialism" rel="nofollow">http://www.tnr.com/blog/plank/109157/conservative-inequality-denialism</a></p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d01b35c970c2012-10-26T14:18:55Z2012-10-26T14:18:55ZEMichaelWow. Just, wow.<p>Wow.</p>
<p>Just, wow.</p>EMichael commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee476e603970d2012-10-26T14:16:34Z2012-10-26T14:16:34ZEMichaelgeez The sickle cell thing is amazingly irrelevant.<p>geez</p>
<p>The sickle cell thing is amazingly irrelevant. </p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d24af4970b2012-10-26T11:46:44Z2012-10-26T11:46:50ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749I did peruse that second paper (I'm bored). The 'investigator' focuses on the top rates, as opposed to effective rates...<p>I did peruse that second paper (I&#39;m bored).</p>
<p>The &#39;investigator&#39; focuses on the top rates, as opposed to effective rates capturing a fuller picture of the overall tax burden for any country.</p>
<p>This, is the neo-lib straw man: attack the 1%, while avoiding the fact that other OECD nations have a much broader tax base across all income levels.</p>
<p>You libs--first you&#39;ll get the &#39;rich&#39;, then you&#39;ll come after the middle. In the spirit of fairness.<br />
</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47603de970d2012-10-26T11:22:29Z2012-10-26T11:22:38ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Still so hostile, Dick! You should have your BP regularly checked. A man at your age with obvious latent anger...<p>Still so hostile, Dick! You should have your BP regularly checked. A man at your age with obvious latent anger issues is at risk for the silent killer: hypertension. I worry.</p>
<p>First, let me open with a quote from a Liberal hero: &quot;It is a paradoxical truth that tax rates are too high today, and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the tax rates…. [A]n economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.” —John F. Kennedy, 1963</p>
<p>I&#39;ve previously read the CRS report you cite (and the affiliated reports proceeding it). The neo-liberal echo chamber trotted-out the subject CRS report like they had found the Higgs Boson! As if a new 20-something page govt report can solve the critical problems of our time! Laughable.</p>
<p>CRS reports, while not peer reviewed in the scholarly, or scholarly journal sense, often do a good (and honest) job of summarizing complex topics for a general audience. But let&#39;s get something straight: CRS is not the definitive word on anything. Not even close. If so, CRS would be the most brilliant think-tank in the world, because they offer analysis on everything in the world. Everything. CRS reports are collegiate master&#39;s level analysis largely based on regression and lit review, with very few original explanatory models to back up their analysis. (As a doctor you should know this.) Now that we&#39;ve got that straight, we can move on.</p>
<p>Here&#39;s your smoking gun CRS conclusion:<br />
&quot;The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.&quot;</p>
<p>Now let me blow your mind, Dr: Instead of &quot;top tax rates&quot; in the above paragraph, you can insert &quot;top, middle, or low tax rates&quot;, and still be correct! How &#39;effn crazy, huh? If I regressed every quintile or decile marginal tax bracket against productivity gains and gdp rates over the past 60 years, this analysis would yield insignificant sensitivity.</p>
<p>Actually, I think if we&#39;re clever in picking our effective top marginal rate, we can get a POSITIVE correlation between rates and GDP growth. (Wow, we really CAN tax ourselves into prosperity.) So, using your logic (a common neo-liberal view), we could raise taxes on ANY or ALL income earners, and not impair productivity rates, and thus not impair GDP growth!</p>
<p>Yet, through it all, absolute levels of effective tax rates are indeed meaningfully correlated with absolute productivity (and per capita GDP) across countries, to a robust level.</p>
<p>This is because advances in technology drive productivity, and productivity drives GDP. But all OECD countries have access to the same technology, so what accounts for the variance in productivity output among countries, Dick? Obviously it&#39;s multifactorial, but I bet tax rates are in there! And I bet they matter, along with labor force rigidity/mobility and regulation.</p>
<p>This 1% fetishism is wearing thin with you guys...</p>
<p>Also, I refuse to read the second paper, because the sketchy &#39;independent&#39; author had this to say on his personal blog:</p>
<p>&quot;This is Filip Spagnoli&#39;s blog, which is mainly about human rights - incl. political &amp; economic human rights such as the right to participate in government (democracy being a subset of human rights) &amp; the right not to suffer poverty - seen from the perspective of philosophy, art, politics (hence &quot;P.a.p.&quot;), economics, statistics, law &amp; psychology.&quot;</p>
<p>I&#39;m sure you understand.</p>
<p>Don&#39;t forget that BP check-up!</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32d22c92970b2012-10-26T11:21:38Z2012-10-26T11:22:38ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Ha, yes, only tell Goldi what he/she wants to hear. Keep reinforcing that confirmation bias! Otherwise, the dissonance might give...<p>Ha, yes, only tell Goldi what he/she wants to hear. Keep reinforcing that confirmation bias!</p>
<p>Otherwise, the dissonance might give he/she cancer or something.</p>
<p>(Your desire for an echo chamber speaks volumes, Goldi. i.e., Goldi doesn&#39;t seek truth, he/she seeks intellectual comfort. Got it.)</p>Barry Ritholtz (@ritholtz) commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee475fa6f970d2012-10-26T11:15:27Z2012-10-26T11:15:27ZBarry Ritholtz (@ritholtz)http://www.ritholtz.comTwo words: Dow 36,000. Hassett is decidely in the camp of people whose analysis you should ignore. he is a...<p>Two words: Dow 36,000. </p>
<p>Hassett is decidely in the camp of people whose analysis you should ignore. he is a massive money loser </p>Tim Worstall commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3d000970970c2012-10-26T08:54:40Z2012-10-26T08:54:40ZTim Worstallhttp://www.timworstall.comThat Lane Kenworthy chart is interesting, isn't it? He uses it to show how the US does *more* redistribution through...<p>That Lane Kenworthy chart is interesting, isn&#39;t it? </p>
<p>He uses it to show how the US does *more* redistribution through the tax system than most other countries do.</p>
<p>He then goes on to point out that if you want to do more redistribution you&#39;re going to have to find some other way than trying to tax the rich. Like,. again as he points out, having a national VAT perhaps. Which is, as we all know, a regressive tax. But it&#39;s probably the only one which produces enough revenue to allow large scale government spending on those benefits.</p>
<p>All of which is entirely beside the point I was making (and most certainly not the one you&#39;ve taken from it).</p>
<p>Whether the US should be more redistributive or not is a political question. Fine, run it through your political opinions. The truth is that it is less redistributive than many other countries, as you point out.</p>
<p>But this isn&#39;t true:</p>
<p>&quot;and also considering that our pre-tax gini is among the highest in the advanced world ( approaching banana republic territory ):&quot;</p>
<p>Nothing very odd about the <br />
US pre-tax gini. Italy&#39;s is higher, it&#39;s around and about the same as France, Germany, Sweden, UK. Within a couple of percentage points of them all.</p>
<p>Post tax post benefit US gini is in the mid to high 30s. Which most certainly is not banana republic territory (50s and up).</p>
<p>Whether the US should be more equal is, as I say, a political question. But we really all should start out from the correct numbers before we discuss it, no?</p>Goldilocksisableachblonde commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee474edbc970d2012-10-26T07:34:54Z2012-10-26T07:34:54ZGoldilocksisableachblondeIt's a shame you wasted so much time posting all that tripe here , Kyle. I can assure you ,...<p>It&#39;s a shame you wasted so much time posting all that tripe here , Kyle. I can assure you , you&#39;re just wasting your keystrokes. I know there&#39;s an election coming up , and you&#39;re trying to win hearts and minds over to the side of your plutocratic paymasters , but I think you&#39;ll have much better luck at some other site. </p>
<p>I can&#39;t really recommend where you might find a more receptive audience , but you could try a google search , something like &quot;blogs for morons&quot;.</p>TexTrialLawyer commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3cff8f09970c2012-10-26T07:13:26Z2012-10-26T07:13:26ZTexTrialLawyerFor God's sake, don't post a third time. ID hate to see you strain your brain trying to peddle such...<p>For God&#39;s sake, don&#39;t post a third time. ID hate to see you strain your brain trying to peddle such a load of horseshit and trying to give it some air of verisimilitude. Must be awfully hard work. </p>Kyle commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4743929970d2012-10-26T05:22:40Z2012-10-26T05:22:40ZKyleThe argument that inequality is a myth is a fact. What everyone ignores in all this arguing is that phrases...<p>The argument that inequality is a myth is a fact. What everyone ignores in all this arguing is that phrases like &quot;income inequality&quot; and talk about &quot;the income&quot; are utterly meaningless. Society is not divided up into fixed classes of people and there is not some fixed supply of income that gets divided up amongst the population by some central authority.</p>
<p>When we speak of for example &quot;the richest 1%,&quot; that is a statistical bracket, not a fixed aristocracy. And when people say things such as &quot;the 1% earn more of society&#39;s income today than in the past,&quot; that is again utterly meaningless. Income is not something that exists in a pre-existing supply that must be divided up, it is simply what people earn in exchange for whatever labor/goods/services they provide. </p>
<p>If one particular income bracket earns more of the total income distribution today, that&#39;s like saying that the 1% today hold a larger share of the total height of people in the population then before. While there is a statistical distribution of height among the population, obviously it concentrating among one statistical bracket does not mean that said bracket is a fixed class that is hogging more of some fixed supply of height for itself. </p>
<p>For all the talk of the middle-class getting pounded, what is odd is that the times thought of as among the most prosperous eocnomically in this nation&#39;s history are also supposedly when the middle-class was being pounded the most according to such people (1980s and 1990s). The 1970s, when the middle-class truly was getting pounded via stagflation and gas lines, they consider as being times of better equality. </p>
<p>The reality is that inequality is at the lowest level it has ever been in human history. Never before has the average citizen enjoyed such a high standard of living. And this level of equality will only increase as we go further into the future, and technologies develop more. Think about the goods and services that will be available to the average person 100 years from now. The difference between 2012 and 2112 will probably be a lot greater than the difference between 1912 and 2012. </p>
<p>And by &quot;goods and services,&quot; I&#39;m not just talking about things like iPads and Playstations and Reebok sneakers, I mean things like forms of healthcare that today are only available to the wealthiest that will be commonplace and affordable and better quality in the future. Forms of healthcare that have not yet even been invented will exist. Industry will be much cleaner and thus the environment a lot healthier. Manufacturing will continue to become much more productive and cheaper. And consumers will have goods and services that are unimaginable today.</p>
<p>We had much higher levels of inequality back in the 1940s, 1950s, 1960s, and so forth, when the difference in living standards between the average person and a rich person was significantly greater.</p>
<p>If you want to look at REAL inequality, look back to the industrial revolution, when middle-class people lived in what by modern standards would be regarded as a dystopian hell. Extreme pollution, lack of sanitation, poor quality healthcare, yet with wealthy people who were, by modern standards, EXTREMELY wealthy. Adjusted for inflation, for example, Andrew Carnegie, John Rockefeller, and J.P. Morgan were worth in the hundreds of billions (Rockefeller controlled around a whole third of the American economy at the time!). But even as rich as these guys were, they still were poor by modern standards in certain ways, with regards to healthcare and other technologies we take for granted today. </p>
<p>Today, every American enjoys sanitation, healthy fresh food, decent quality healthcare (provided they can afford it, but more on that in a second), access to books and knowledge, and innumerable goods and services that before were unthinkable. The environment enjoys much cleaner industry and the major cities, while still suffering pollution, are one heck of a lot less polluted then things were in the heydey of the industrial revolution. </p>
<p>Look at cars for example. Affordable cars today have Internet access, navigation systems, people have cell phones, etc...all things that only luxury vehicles had just twenty years ago, and even then, only in a much more primitive form. </p>
<p>You can be living in a trailer today and &quot;poor,&quot; yet have air conditioning, heat, flat screen television, cable, high-speed Internet, running hot and cold water, basic modern appliances (refrigerator, stove, oven, microwave, coffee maker, etc...), car with basics such as power windows and doorlocks, air conditioning and heat, navigation system, etc...also cell phone. Said person can buy premium coffee at Starbucks, they can shop whereever they please, they can enjoy fresh fruit and vegetables and eat very healthy on the cheap. Think about what said person in the year 2112 will have access to. </p>
<p>What is pounding the middle-class is not inequality of income or wealth, it is the rising costs of higher education, the rising costs of healthcare, and the current economy. The rising costs of higher education are a good deal due to the government having subsidized it for the past about seventy years. Had they never started subsidizing it, college would still be affordable and the market would not be over-flooded with bachelor&#39;s degrees the way it is. </p>
<p>Healthcare&#39;s costs are due to a variety of factors, a lot of it government involvement (as healthcare and health insurance are far from being any free market). And the current economy is due to the financial system almost blowing up. </p>
<p>The natural direction of market capitalism has been to consistently reduce inequality, and this will only continue to be the path of it, despite people with an agenda trying to claim to the contrary as if we are headed towards being 19th century Russia or something (where you had a real aristocracy 1% living on the backs of a very poor and oppressed 99%). </p>
<p>The policy proposals the Left call for are not going to stop this mythical inequality they believe is happening either. Raising taxes, creating more regulations, creating more government programs, etc...if anything, will only serve to truly increase inequality, but making wealth and job creation more difficult, punishing success, and rewarding government dependency (we see this to an extent in California where you have extreme wealthy along with a large welfare underclass in the state). </p>
<p>As for all the talk about how the American economy boomed in the past, that was because the rest of the industralized world had been bombed to smithereens during WWII and was rebuilding, while the U.S. had built up a massive amount of industry during WWII. That is a situation that we will (hopefully!) never face again.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3cfd7461970c2012-10-25T23:58:50Z2012-10-25T23:58:50ZDrDickDemonstrating once again your ignorance of research design and how to conduct and interpret scholarly research, as well as how...<p>Demonstrating once again your ignorance of research design and how to conduct and interpret scholarly research, as well as how to conduct a Google search. According to the Congressional Research Service:</p>
<p>&quot;The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate<br />
and the top capital gains tax rate do not appear correlated with economic growth. The reduction in<br />
the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The<br />
top tax rates appear to have little or no relation to the size of the economic pie.&quot;<br />
<a href="http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf" rel="nofollow">http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf</a></p>
<p>Here is an cross country comparison: <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029585" rel="nofollow">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029585</a></p>
<p>Your refutation is refuted.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3cfd3f6a970c2012-10-25T23:11:03Z2012-10-25T23:11:08ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749A quick search reveals the following: Labor productivity in the US is about 1/3 higher than the OECD average in...<p>A quick search reveals the following:</p>
<p>Labor productivity in the US is about 1/3 higher than the OECD average in 2010. So, a stylized fact inferred from the below graph is that higher marginal tax rates actually LOWER national labor productivity. (Which of course a 10 year old who cuts lawns could tell us.)</p>
<p>The null is rejected almost prima facie.</p>
<p><a href="http://www.jpc-net.jp/eng/research/image/201202_1.jpg" rel="nofollow">http://www.jpc-net.jp/eng/research/image/201202_1.jpg</a></p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32ceae52970b2012-10-25T23:00:22Z2012-10-25T23:00:41ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Dick, your hypothesis is easily proved (or disproved). You're establishing a null hypothesis such that countries with lower marginal tax...<p>Dick, your hypothesis is easily proved (or disproved). You&#39;re establishing a null hypothesis such that countries with lower marginal tax rates will show similar levels of aggregate labor productivity, as compared to countries with higher marginal tax rates.</p>
<p>I haven&#39;t checked, but I bet we reject the null....</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee4717b36970d2012-10-25T19:51:36Z2012-10-25T19:51:36ZDrDickThere is also this (check the top chart) on income of the top 1% and productivity: http://www.motherjones.com/politics/2011/06/speed-up-american-workers-long-hours<p>There is also this (check the top chart) on income of the top 1% and productivity: <br />
<a href="http://www.motherjones.com/politics/2011/06/speed-up-american-workers-long-hours" rel="nofollow">http://www.motherjones.com/politics/2011/06/speed-up-american-workers-long-hours</a></p>Goldilocksisableachblonde commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee47178cc970d2012-10-25T19:49:46Z2012-10-25T19:49:46ZGoldilocksisableachblonde" And such things really do make a difference: around and about 10 points on the gini for example. "...<p>&quot; And such things really do make a difference: around and about 10 points on the gini for example. &quot;</p>
<p>A very lame difference as compared to other advanced economies , and also considering that our pre-tax gini is among the highest in the advanced world ( approaching banana republic territory ):</p>
<p><a href="http://lanekenworthy.files.wordpress.com/2008/01/taxesandinequality-figure1-test3.png" rel="nofollow">http://lanekenworthy.files.wordpress.com/2008/01/taxesandinequality-figure1-test3.png</a></p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32cdaec8970b2012-10-25T19:43:33Z2012-10-25T19:43:33ZDrDickThe conclusion of the paper is that compensation does not correlate to contributions to productivity. From that, we can conclude...<p>The conclusion of the paper is that compensation does not correlate to contributions to productivity. From that, we can conclude that higher taxes will not necessarily have an adverse impact on overall productivity, since those at the top are not all that productive compared to income. The obvious factor accounting &quot;for various degrees of productivity-wage dislocations&quot; is that management sets compensation and is engaged in rent seeking (which is born out by other research). Do try to read what is written and quit trying to use it to justify income inequality.</p>Jay Z commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32cd976f970b2012-10-25T19:26:45Z2012-10-25T19:26:45ZJay ZSuppose someone invents a cure for all cancers in pill form. The cure could easily be manufactured and available at...<p>Suppose someone invents a cure for all cancers in pill form. The cure could easily be manufactured and available at a low price. However, the inventor is allowed to protect his idea through a patent, and chooses to sell it to rich people at a million dollars a pill.</p>
<p>Now in this world, if I can&#39;t afford the cancer pill in theory I am no worse off that I am in the world without the pill. Except that they are two different worlds. In the pre-pill world I was more self-actualized, I had access to more of that world. No one had a cure for cancer, so everyone was equally actualized in that world. In the new post-cancer pill world, a cure for cancer exists, but I have no access to it. I am severly less actualized than the rich people who have access to the cancer pill. They are two different worlds.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32cd5579970b2012-10-25T18:35:04Z2012-10-25T18:35:09ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749What I read is that there exist other factors beside productivity (factors not fully elucidated) that account for various degrees...<p>What I read is that there exist other factors beside productivity (factors not fully elucidated) that account for various degrees of productivity-wage dislocations.</p>
<p>Seems reasonable to me.</p>
<p>The Yankees paid Arod a lot of money this year because they believed his performance would create value for the firm (the team). In this narrow example, when managers are wrong (which they were), your paper&#39;s conclusions comport with reality.</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017c32cd48be970b2012-10-25T18:24:23Z2012-10-25T18:24:57ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749The pie is a metaphor for wealth creation. The first principals assertion is that folks will create more wealth, when...<p>The pie is a metaphor for wealth creation.</p>
<p>The first principals assertion is that folks will create more wealth, when they are incentivized to create more wealth. We incentivize wealth creation by allowing folks to keep some portion of the wealth they create. We can thereafter tax some of the wealth away, for redistribution.</p>
<p>More taxes = less incentives. Less incentives = less wealth. Less wealth = less redistribution. Less redistribution = poor are poorer.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3cfbbc2d970c2012-10-25T18:14:11Z2012-10-25T18:14:11ZDrDickIf that is your take away, you obviously have zero reading comprehension. Of course, we already knew that. I also...<p>If that is your take away, you obviously have zero reading comprehension. Of course, we already knew that. I also knew who it was and you are still throwing out the same fact free, unsupported BS as usual. We will take you seriously when you provide actual data and a coherent logical argument (neither of which you seen capable of).</p>Anthony Juan Bautista commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017d3cfbb6f0970c2012-10-25T18:09:10Z2012-10-25T18:09:16ZAnthony Juan Bautistahttp://profile.typepad.com/d107773844531156749Dick. It's me, D! I found out how to change my handle--the single letter assignment was an artifact of logging-in...<p>Dick. It&#39;s me, D! I found out how to change my handle--the single letter assignment was an artifact of logging-in through Yahoo. How great we found one another again!</p>
<p>So what bullshit are you peddling today? Exploitation of the proles by the elites? Straight out of Das Kapital. Solid pick, Dick.</p>
<p>I read your source. Yes, Alex Rodriguez was indeed overpaid relative to his productivity this year. Spot on.</p>DrDick commented on 'The Myth that Growing Consumption Inequality is a Myth'tag:typepad.com,2003:6a00d83451b33869e2017ee470e870970d2012-10-25T17:58:18Z2012-10-25T17:58:18ZDrDickThey are also cheaper than landlines and pretty much a necessity if you want a job.<p>They are also cheaper than landlines and pretty much a necessity if you want a job.</p>